For the British, there's still no place like a dream home abroad in 2006

Millions of us are moving to fairer climes, but you'd be a fool to rush in, says Sarah Bridge
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The Independent Online

f you have a new year's resolution to buy your dream house abroad, you are not alone: estate agents selling property overseas are enjoying a post-Christmas boom.

"January is particularly busy this year," says Les Calvert, the managing director of "Business is crazy," agrees Trisha Mason, the head of VEF, which specialises in French property.

If you do take the plunge in 2006, do your research. "You have to know where you want to live," says Calvert. "You have to know what it is like all year round, where the nearest airports are, what the schools and the health facilities are like, and if you can get employment out there."

Nine times out of 10, people buy something completely different than they had planned, he adds, because they hadn't thought it through. Mason adds: "We spend three or fours hours with a buyer before showing them anything, because often people don't know what they are looking for."

Getting to know the locals can pay off, as word-of-mouth might direct you to properties that may not have been advertised. And if you are looking online, watch out for being charged a finder's fee.

Once you have decided on an area and a range of properties, arrange a viewing. Make sure you have a clear idea about what you can afford, and stick to it.

Also, plan your finances. If you are relocating permanently, selling your UK assets or retiring, then you are likely to be a cash buyer, which simplifies the process. If not, you can extend your main mortgage, usually up to 75 per cent of the second property's price. This can be a cheap way of raising cash, but you risk losing both homes if you cannot keep up with the repayments.

Alternatively, you can take out a separate mortgage on your home abroad, ether through a high street bank, such as the Halifax, Abbey or Barclays, or through a specialist, such as Conti Financial Services, which offers 200 residential mortgages in more than 30 countries worldwide.

But don't stretch yourself to the limit: always have money left over for refurbishments, repairs and unexpected costs.

Having raised the money on your dream house, don't think that the research is over. "Gather as much information on the property as you can," advises Calvert. "Are there any outstanding debts on the house? What about the electrical and water supplies? Does it come with land, and what planning permission do you need to alter anything?" This information can be obtained from the vendor, the estate agents and local experts.

Expert advice is invaluable, says Simon Conn, the managing director of Conti Financial Services. "It amazes me how sensible people will suddenly take all sorts of risks when it comes to buying overseas."

He remembers one English couple who bought an Italian farmhouse to convert it into a 12-bedroom guesthouse. Only after they had bought it did they check for planning permission to find that it was grade-one-listed and that any alterations would be buried for at least 18 months in committees.

Many people choose not to have a survey at all. This is a huge risk to take, says Simon Conn. "One couple bought a new house and didn't bother with a survey. Six months later, cracks appeared, and the foundations turned out to be six inches deep rather than 18."

Once you have found your dream home, you may need to move fast, but make sure that you are 100 per cent sure you want it, advises Calvert. "You will have to put down a deposit, which could be up to 10 per cent of the value and which is non-refundable if you change your mind."

Use a solicitor who speaks the local language and English to check everything, he says, and never sign a contract you don't understand, always be aware of extra costs and legal fees, and know exactly what you are getting into. Buying a house differs from country to country, but there are lots of experts and helpful books and internet sites. Your estate agent should know lawyers, surveyors and architects who can advise you.

If all this finally seems too daunting, you can pay a firm, such as VEF, to do everything, for an all-inclusive fee. Mason says: "If you don"t speak French and are unfamiliar with the law on tax and inheritance, we can walk people through it."

Another wise move is planning how you are going to pay in a different currency - it could save you thousands of pounds. Contact a high street bank or a specialist such as Moneycorp to arrange either a spot transaction, which transfers money within five days, or a forward transaction, which can fix the rate of exchange for up to two years.

Denise Blackburn, of Moneycorp, says: "Just a small change in the rate of exchange can be very significant when you are talking about large sums of money, and it isn't something you should leave up to the last minute."

Don't ignore the tax implications of living or owning abroad, either. Jane Hammonds, of the financial adviser Blevins Franks, says that getting it wrong can be costly. "If you don't pay enough tax, you can be penalised."

How not to do it

* Do not think of it as escaping from, but moving to. Often people concentrate on what they are leaving behind, whereas they should be wondering whether their summer paradise will be the same in the depths of winter.

* Know where you want to be. It is not enough to phone up an estate agent and ask them what they have for £40,000.

* Don't try to do too much in too short a time. You wouldn't try to house-hunt across Yorkshire, Norfolk and Gloucestershire in three days, so why attempt the equivalent in France?

* Don't rely on your memory. Take photos.

* It is a viewing trip, not a holiday. Leave the big lunches with wine for when you have bought your property.

* If you can, leave the children behind when you go viewing. They will get bored driving around and you'll be distracted.

* Balance your head with your heart: is that renovation project going to be a financial black-hole?

* Do not set unrealistic deadlines. If you absolutely have to get that gîte up and running by Easter you are setting yourself up for problems.

* Do not rely on budget airlines always being there. If a service is cut, you may find that popping back to the UK for the weekend isn't possible.

* Think about fixing the currency exchange rate when you know you're going to buy a property, to iron out fluctuations.

* Talk to an expert about legal, financial and tax positions. If things are not done correctly, they can cost a lot to put right.

Lindy and David Gander: 'We got a property specialist to take us through the process'

Lindy and David Gander had thought of relocating out of London, but only as far as Devon or Cornwall. However, a love of France persuaded the couple to "take the plunge" and move to south-west France near the Pyrenees. Lindy, 44, says: "We had browsed agents' websites, but once we put our house on sale, it became serious."

The couple, who have a daughter Nancy, 12, sold their house in north London for £270,000 in September 2003. The following January they bought a five-bedroom house in Navarrenx for €70,000. The house is both their home and an art gallery, Le Petit Chien, run by David, 45, a graphic designer, and costume designer Lindy. They chose the area as it is close to two airports, Pau and Biarritz, and Nancy is at a local school.

Rather than going it alone, the Ganders chose to buy through VEF, a French property specialist which, for a one-off fee, takes buyers through the entire sales process including handling legal documents, negotiating a price and dealing with the French notary who oversees the process.

"We were scared to death of buying in France," Lindy says, "so we were happy to have someone else to take us through the whole process." They have just bought a second house in the area and handled it themselves this time.

Lindy's advice to buyers? "Don't overstretch yourself financially, and make sure you have a way of earning money here."